Human Resource & Labor News
www.agc.orgJuly 17, 2012 / Issue No. 4-12
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On the Inside
Wages and Benefits
Supreme Court Rules on Healthcare Law
Distributing Affordable Care Act Insurance Rebates to Employees
Labor Department Updates Health Benefits E-Laws Advisor
Year-to-Date Collective Bargaining Yields Average 1st-Year Wage and Benefits Increase of 2.3%
Professional Development
Donít Miss July 19 Webinar on Subcontractor Training & Flowdown Requirements
Earn HRCI Credits at AGCís Co-Located HR and Training Conferences
Federal Contracting
AGC Urges Labor Department to Reconsider OFCCP-Proposed Rules
AGC Recommends Changes to Form I-9
Distributing Affordable Care Act Insurance Rebates to Employees

The Medical Loss Ratio Provision of the Affordable Care Act, President Obama’s 2010 health care reform law, is now in effect.  As a result, many companies are starting to receive rebate checks from insurance companies, leaving HR professionals to determine the best way to distribute the funds to eligible employees.  The rule went into effect January 1, 2011.

According to the provision, also known as the 80/20 rule, insurers must use at least 80% (85% for large insured groups) of premium dollars received on health-care-related expenses or refund the difference to customers by August 1. 

There are many considerations for employers who are either self-insured or participate in a group insurance plan.  The U.S. Department of Labor has issued guidance to help employers manage the process of determining how the funds should be allocated.  The Internal Revenue Service has also issued guidance on the federal tax consequences to insurers, employers and employees when a rebate applies.

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